Eskom recently announced it would be increasing electricity prices in South Africa by nearly 16%. Starting from 1 April 2020, the average standard tariff for its customers will climb by 5.44c/kWh to 134.30c/kWh.
While this change will likely impact all typical home electricity users on the utility’s grid, it is important to understand that the extent of the increase won’t necessarily be a direct reflection of how much more you will have to pay.
Unless you are an Eskom direct customer, your power is distributed via a municipality or other local authority.
These entities have to carry their own costs to distribute and maintain electricity supply to home users, which could include expenses typically incurred on labour related to checking metres, administration of electricity bills, and maintenance and repairs of electricity infrastructure.
They therefore add their own charges to the electricity which they buy from Eskom at its bulk selling price, which can increase your bill fairly significantly.
We calculated the typical residential electricity tariffs for some of South Africa’s major cities and towns to see which had the most expensive and cheapest rates.
Not a straightforward equation
Directly comparing electricity prices between municipalities is not as straightforward as one would hope, however.
Municipalities charge vastly different rates for their basic services, while also classifying electricity users according to different metrics.
One example of this is how some municipalities increase the price per kWh based on “blocks” indicating various levels of usage.
For example, the Tshwane Metro currently charges electricity tariffs for residential users according to four blocks:
1 to 100kWh – 170.3 c/kWh (excl. VAT)
101 to 400kWh – 199.3 c/kWh (excl. VAT)
401 to 650kWh – 217.1 c/kWh (excl. VAT)
More than 650kWh – 234.9 c/kWh (excl. VAT)
However, Johannesburg uses completely different blocks of 0-300kWh, 301-500kWh, and greater than 500kWh.
In addition, certain municipalities charge different rates for prepaid and conventional metres.
For our calculation, we used Eskom’s claimed average of 30kWh per household – or 900kWh per month – to define the block tariff used.
We also included any additional basic or service charges that the municipalities added, which were in most cases latched onto postpaid services.
The table below shows the average prices for residential postpaid/billed and prepaid electricity across various South African cities, ranked from most expensive to cheapest.
Cheapest and most expensive
Our calculations showed that Cape Town was the most expensive city for residential users of electricity who consumed 900kWh per month.
Its average residential tariff of R3.01 was R1.67 more than Eskom’s tariff.
The Mother City was followed by the municipalities of Buffalo City (East London) and Polokwane, both of which charged R1.44 more.
Among the cheapest municipalities were Ethekwini (Durban), Johannesburg, and Mbombela (Nelspruit). All three of these municipalities added R1 or less to Eskom’s tariff.
It should be noted that these figures are highly dependent on your exact usage, as well as the type of connection by which your home is linked to the grid.
The table below illustrates how these tariffs would change should the user consume 450kWh per month, half of what Eskom claims to be the household average.
For a monthly usage of 450kWh, Ekurhuleni was by far the cheapest of the municipalities – at just R1.58 per kWh on average. This was only 28c more than Eskom’s selling price of R1.34.
Other cheap municipalities included Mbombela (Nelspruit) at R2.03 per kWh and Ethekwini (Durban) at R2.09 per kWh.
Cape Town, which was the most expensive in the previous comparison, is among the more affordable municipalities as well, at R2.31 per kWh on average.
In this instance is that Johannesburg postpaid customers would actually pay more per kWh of electricity even with less usage due to the fixed service and capacity charges levied on their connection.
This includes a R147.47 service charge and around R500 for the capacity, which adds R1.45 per kWh to the R1.43 per kWh consumption price for a total of R2.87 per kWh. This is a stark contrast to the R1.70 per kWh they would pay when using a prepaid meter.
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